QUESTION 1 The following table provides yearly rate of returns on Dell and on IBM from 2020 to 2023: Year 2020 2021 2022 2023 Return on Dell Return on IBM 18 12 8 10 8 9 15 12 1.1 Calculate the variance of the return on Dell and the variance of the return on IBM. Is the return on Dell more volatile than that on IBM? Why? 1.2 Calculate the Return per unit of Risk Criterion (RRC) on Dell and on IBM (Hint: RRC = Mean Return/Standard Deviation); 1.8 Would you invest in Dell or IBM? Why or why not? QUESTION 2 The following table contains yearly productivity and wage at ABC Corporation from 2020 to 2023: Year 2020 2021 2022 2023 Productivity (%) 11 13 14 18 Wage ($/hour) 5 6 7 10 2.1 Calculate the variance of productivity and the variance of wage; 2.2 Calculate the covariance between productivity and wage. Is the relationship between productivity and wage negative? Why or why not? 2.8 Calculate the coefficient of correlation between productivity and wage. Is the relationship between productivity and wage weak? Why or why not? 2.4 In order to boost productivity, would you recommend that ABC Corporation increase wage? Why or why not? QUESTION 3 Construct and interpret the confidence interval for the population mean u. The mean and the standard deviation of a random sample of 64 measurements are: X=20 S=2 Assume that the error level is 5%; that is, a=5%. QUESTION 4 Construct and interpret the confidence interval for gas price in California. A random sample of 9 gas stations throughout California was surveyed. The following is the summary statistics of the sample: X-4.2 S=1.2 Assume that the error level is 10%; that is, a=10%.

QUESTION 1 The following table provides yearly rate of returns on Dell and on IBM from 2020 to 2023: Year 2020 2021 2022 2023 Return on Dell Return on IBM 18 12 8 10 8 9 15 12 1.1 Calculate the variance of the return on Dell and the variance of the return on IBM. Is the return on Dell more volatile than that on IBM? Why? 1.2 Calculate the Return per unit of Risk Criterion (RRC) on Dell and on IBM (Hint: RRC = Mean Return/Standard Deviation); 1.8 Would you invest in Dell or IBM? Why or why not? QUESTION 2 The following table contains yearly productivity and wage at ABC Corporation from 2020 to 2023: Year 2020 2021 2022 2023 Productivity (%) 11 13 14 18 Wage ($/hour) 5 6 7 10 2.1 Calculate the variance of productivity and the variance of wage; 2.2 Calculate the covariance between productivity and wage. Is the relationship between productivity and wage negative? Why or why not? 2.8 Calculate the coefficient of correlation between productivity and wage. Is the relationship between productivity and wage weak? Why or why not? 2.4 In order to boost productivity, would you recommend that ABC Corporation increase wage? Why or why not? QUESTION 3 Construct and interpret the confidence interval for the population mean u. The mean and the standard deviation of a random sample of 64 measurements are: X=20 S=2 Assume that the error level is 5%; that is, a=5%. QUESTION 4 Construct and interpret the confidence interval for gas price in California. A random sample of 9 gas stations throughout California was surveyed. The following is the summary statistics of the sample: X-4.2 S=1.2 Assume that the error level is 10%; that is, a=10%.

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